This Chinese billionaire felt lost in US without WeChat, mobile payments
Liu Chuanzhi, chairman of Lenovo parent Legend Holdings, said China has surpassed the US in terms of mobile internet technology, digital content and innovative business models.
A recent trip to the United States gave Liu Chuanzhi, the founder of personal computer maker Lenovo Group, a taste of how millions of Chinese travellers feel without the hi-tech comforts of home – WeChat and mobile payments.
The 73-year-old Chinese entrepreneur, who recently went for a check-up at a US hospital, attempted to set up a chat group on WeChat to connect his staff with his physicians. The suggestion drew a blank – no one seemed to understand him.
Liu’s staff in the US had Twitter on their devices, not WeChat. The do-everything messaging app from Tencent Holdings had 980 million monthly active users as of January, most of whom are in China.
Another annoying experience for Liu during his trip was carrying pocket change for small purchases. “That was very troublesome, too,” said Liu, who like many Chinese are used to the convenience of mobile payments.
Those experiences were shared by Liu in his speech about the country’s innovative spirit on Tuesday before the China Entrepreneurs Forum in the northeastern province of Heilongjiang. His comments were verified by Lenovo.
The chairman of Legend Holdings, the controlling shareholder of Lenovo, said China was now comparable to Japan and ahead of the US in terms of mobile internet technology, digital content and innovative business models.
“If you haven’t stayed abroad for a long time, you might not understand [the difference],” said Liu, citing his recent experience in the US.
His insights give credence to how Chinese technology companies have cultivated a hi-tech universe so large that it exists almost exclusively on its own – sustained by the country’s 1.4 billion people – but cut off from the rest of the world by Beijing’s Great Firewall, which blocks content not approved by the government.
Chinese technology permeates every level of society on the mainland, from Tencent’s ubiquitous WeChat messaging app to mobile payments with Alipay or WeChat Pay, with few foreign internet companies succeeding at appealing to Chinese consumer preferences even if they are not banned outright.
Outside the firewall, a parallel internet ecosystem exists where companies banned in China, like Facebook, Google and Twitter, market their products to the remaining six billion people on the planet.
Protected from foreign competition, Chinese companies like Tencent and Baidu have flourished, attaining market valuations that rival global firms like Facebook. But the strong growth of China’s closed technology ecosystem means that US companies wanting to enter the massive market or Chinese firms going global must offer two sets of products – one geared for the rest of the world, and another specifically for China.
Liu acknowledged that the mainland’s business environment was “a very important factor for Chinese enterprises and China’s economy to develop better”.
It is an environment that has nurtured the country’s rapid growth into the world’s biggest internet, smartphone, mobile payments and e-commerce market.
The mainland had an estimated 772 million internet users – more than double the US population – at the of December last year, according to online research firm Statista.
China Mobile, China Unicom and China Telecom had a combined mobile subscription base of about 1.4 billion as of January.
From January to October last year, government statistics showed that mobile payment transactions in China amounted to 81 trillion yuan (HK$12.8 trillion), making it the world’s largest market. In contrast, the US market was worth just US$49.3 billion last year, according to eMarketer.
It also estimated China’s retail e-commerce sales to reach US$1.5 trillion this year.
Still, Liu said China needed to rejuvenate “because the uncertainty in this world is too great”.
“We must be stronger. The strength of the country is not only in science and technology, but also in its heritage,” he said.
“In the future, there will be fundamental changes in society because of [developments in] big data, artificial intelligence, new materials, alternative energy and health care.”